Tracking the Impacts of Covid on Toronto’s Office Markets

Cushman & Wakefield recently released a very interesting report that looked at how Covid has impacted the office market in Toronto, with particular emphasis on subleases.

Below are some key findings from this report:

  • Between March 17 and September 11 (following Provincial lockdown orders), over 2 million sf of new sublet availability was added to the GTA office market
  • This space is concentrated in the downtown market where 1.4 million sf or 67% of the new sublets took place
  • Meanwhile, in the suburban markets, there has only been 525,000 sf of new sublet availability added since the crisis began
  • Before Covid, Toronto’s Central Business District (CBD) office market — ranked as the 4th largest in the United States and Canada — held the top place for being the tightest market with the lowest availability rate (1.9%)
  • Hard-hit sectors such as travel-related, media companies and other small-to-medium sized firms located in downtown fringe markets surrounding the core were the first to react. This is where a full 85% of all new downtown sublet activity, or 1.2 million sf, has been brought to market
  • Despite an increase in weekly sublet activity, the average sublet size remained relatively small at 8,000 sf. That, however, is anticipated to likely change as some larger sublets have started to enter the picture in recent weeks
  • The authors note that the new flood of sublet space has pushed the downtown availability rate up to at least 4.5% in Q3. This is still low and not expected to tip the scale in favour of occupiers. As well, the authors indicate there is no evidence that rental rates have been impacted at this stage, which underscores the strength of market and its ability to withstand shock

Below are some charts/maps from the report that summarize the key points noted above:


For more information, you can also check out my thread on twitter about it:

The Attractiveness of Global Business Districts

The Urban Land Institute and Ernst & Young recently released a report that ranks the attractiveness of downtowns and other “global” business districts (GBDs) of major global cities.


In terms of overall rankings, the GBDs of London, NY, Tokyo, and Paris take the top 5 spots (London showing up twice with City and Canary Wharf), with Toronto not too far behind at #11.

The report also breaks down the overall rankings to show the particular factors that together make up a successful GBD; they are:

  • Ability to attract and retain talent
  • Proximity to markets, customers, and partners
  • Quality of the urban environment
  • Local and global influence
  • Bespoke and innovative real estate supply

Toronto ranks within the top 5 for talent and urban environment quality (and #6 for real estate supply). So the City’s Downtown clearly punches above its weight class and can stand toe to toe with some of the world’s economic heavy hitters (if population, # of employees, GDP were compared).

I had two thoughts when reviewing this report:

  1. Some cities like London and NY have more than one major business district (London with City and Canary Wharf, and NY with Midtown and Financial District) that is competitive with the world’s largest business districts. Tokyo, Paris and Seoul similarly have multiple economically powerful employment nodes throughout the region (although not identified in this report). Toronto too does have several employment nodes, but none of these perform at the level the City’s Downtown does.
  2. The sheer breadth of factors and qualities that make downtowns and business districts successful – there is no one silver bullet or one key element that drives that success. The closest thing could be an extensive, connected and reliable transportation network/system. But that alone will not drive the success of a downtown or business district. It is a contributor. And growing in importance over the last few years has been the quality of the environment and access to amenities. There is a reason cities like Singapore, Chicago, Sydney and Toronto are ranked among the top 5 in the quality of urban environment factor. One picture of Chicago’s Millennium Park, Sydney’s Opera House or Singapore’s Gardens By the Bay is enough to show the huge value derived from park space and amenities for residents and employees.

The question for downtowns and business districts is now more focused on Covid response, recovery and rebuild, with the short to mid term period becoming the most interesting to monitor.

Toronto’s Resale Market during Covid (Part 3 – June, 2020)

Following up to my previous posts from a few weeks back on the impact of Covid on Toronto’s resale market (see here and here), I have provided below updates to my charts and some commentary on the state of the market as of the first two weeks of June.


The first chart below shows weekly sales for 2020 (ending on June 9th) with monthly sales for years prior (2019, 2018 and 2017)

What we see is a continued rise in sales over the weeks – a good sign for the resale housing market.

Shown below are monthly prices for 2020, compared to the last 3 years, spread out over weeks

What we see is relatively resilient and stubborn values in Toronto. Although there was a brief dip evidenced in April, prices rebounded fairly quickly. I would caution toward assigning too much weight to these monthly stats because of their volatility, especially now with fewer sales (roughly 55% of sales in May 2020 compared to May of last year).

And finally below I have provided weekly sales and monthly price charts for condos and freeholds.


To summarize, here is what we know so far:

  • Sales have consistently grown over the weeks – and they may actually reach July levels from previous years if they continue at this pace
  • Prices bounced back quickly from April and appear quite resilient during the last few weeks
  • Big jump in freehold sales over the last two weeks
  • The summer and especially the fall market will be very interesting to monitor, and whether there will be an increase in listings and pent up demand
  • For now, sales are expected to continue to increase and prices to remain stable